CEU 0.00% 54.5¢ connecteast group

results for half year ended 31 december 2007

  1. 2,382 Posts.
    here it is.

    27 February 2008
    Financial Performance
    The ConnectEast Group (ASX: CEU) today reconfirmed that the EastLink project is on
    budget and on track to open by mid-2008, well ahead of its contract date of November
    2008. Approximately $2.4 billion or 96% of the total $2.5 billion construction budget
    has now been expended.
    ConnectEast also said it remained in a strong financial position in the wake of the
    refinancing in December 2006 which locked in very competitive interest rate margins.
    The interest rate on the Group’s debt is 100% hedged to 2010 and 80% hedged until
    2014. ConnectEast has no requirement to refinance its debt facilities until November
    ConnectEast reported a net result of $Nil for the six months ended 31 December
    2007. The following items were accounted for in the Income Statement for the half
    year ended 31 December 2007 – net administrative costs of $5.325 million,
    depreciation of $0.857 million and an income tax benefit of $1.870 million, resulting in
    an Operating Loss after Income Tax and before Finance Costs Attributable to
    Unitholders of $4.312 million. However, as ConnectEast Group units were classified
    as debt for the period 1 July 2007 to 21 December 2007, the result has been recorded
    against net assets attributable to unitholders rather than equity, resulting in a $Nil
    result for the ConnectEast Group.
    The constitutions of ConnectEast Investment Trust and ConnectEast Holding Trust
    were amended on 21 December 2007 to remove finite life clauses. Accordingly, the
    units in both trusts are classified as equity for accounting purposes from 21 December
    Annual Distributions from 1 October 2007
    As previously advised and as a result of the positive progress and prospects for
    EastLink and the strong financial position of ConnectEast, the Board gives notice that
    it intends to declare a distribution for the period 1 October 2007 to 31 March 2008 of
    5.25 cents per stapled unit. This represents an increase of 2 cents per stapled unit. Itis the directors’ intention to increase the remaining semi-annual distributions to 31
    March 2010 to 5.25 cents, amounting to an annual distribution of 10.5 cents.
    The ConnectEast Group’s Distribution Reinvestment Plan (DRP) is available for the
    full distribution of 5.25 cents per stapled unit, 3.25 cents per stapled unit being
    underwritten and the remainder funded from cash reserves.
    EastLink’s Progress Towards Operation
    As the many facets of the landmark EastLink project move closer to completion,
    ConnectEast is finalising its preparations for the transition to operations.
    Managing Director John Gardiner said the outstanding progress on EastLink’s civil
    engineering works was being matched by advances in the delivery of the motorway’s
    tolling, traffic management, safety and customer service elements.
    “The rate of progress across the project has been outstanding and means
    ConnectEast can reconfirm its high level of confidence that EastLink will be open to
    traffic by mid-2008 – well ahead of the contract schedule of November 2008,” Mr
    Gardiner said.
    “The complex nature of the remaining tasks as well as the extensive testing and
    independent verification regime required means that ConnectEast does not wish to
    commit to a specific opening date at this stage.
    “Suffice to say, we are focused on delivering EastLink as soon as possible, whilst
    ensuring the motorway, and particularly its twin tunnels, is safe to open and that
    ConnectEast can efficiently operate as a business with a high level of customer
    Mr Gardiner said the Group’s preparations for operations are well-advanced. Key civil
    engineering works currently being finalised include the final asphalt layers along the
    motorway, completion of the interchanges at Springvale Road and the Frankston
    Freeway, ongoing landscaping works, and completion of the last of EastLink's 88
    “Fit-out of EastLink's 1.6km tunnels is close to completion, with the traffic
    management features (such as automatic incident detection cameras), ventilation and
    safety systems steadily being commissioned and thoroughly tested.
    “The safety and traffic management systems are not only related to the tunnels.
    These systems are integral to safe and efficient travel along the entire 39km length of
    the road.
    “Of equal significance, the final stage of end-to-end testing of the complex software
    components and sub-systems that make up the integrated tolling and customer
    service system is moving towards completion,” Mr Gardiner said.
    From a corporate perspective, ConnectEast continues to build up its team and
    infrastructure in readiness for operations. The recent official opening of the Group's
    corporate headquarters in Ringwood, co-located with the EastLink Operations Centre
    (ELOC) adjacent to the motorway itself, marked a key milestone in preparations.
    ConnectEast has also now opened all five of its customer service centres in major
    shopping centres strategically located within EastLink's 39km corridor. Staff are now
    engaging with our future customers.
    “Consistent with our previous experience at mobile displays and information booths at
    local community events, the feedback from visitors to the EastLink shops has been
    overwhelmingly positive, with an ever-growing sense of anticipation of the day
    EastLink will open,” Mr Gardiner said.
    “People are increasingly frustrated by traffic congestion in Melbourne's east and
    south-east, and are impressed by the sheer scale of EastLink and the potential travel
    time savings and improved transport reliability it will bring.”
    To build on this positive feedback, ConnectEast will shortly begin the first phase of its
    marketing campaign for EastLink with the commencement of advertising targeted at
    local residents and businesses.
    Mr Gardiner said the prospects for EastLink continued to be highly encouraging,
    reflected in the strong commercial and industrial activity along the tollway corridor as
    businesses move to take advantage of the enhanced connections that will be
    Companies such as Jayco, Leighton Properties, Salta Properties, Pellicano Builders
    and Grenda Corporation have secured large holdings of land in the south-east of
    Melbourne. Australand has established the 100 hectare South Park Industrial Estate
    in Dandenong South adjacent to EastLink and has already acquired high quality
    tenants such as Priceline, Allied Pickfords and San Remo Foods.
    In relation to traffic projections, ConnectEast has continued to test and re-evaluate its
    original forecasts for EastLink by monitoring three years of real traffic and travel time
    trends in the corridor and comparing these to projected growth during this time. The
    Group's confidence in those forecasts has been maintained.
    “Our anticipation of a relatively fast ramp-up phase of around 15 months for EastLink
    to achieve steady state traffic volumes is primarily based on the wide acceptance of
    electronic tolling in Melbourne, the presence of more than one million tags in the
    marketplace and the high level of congestion on alternative routes,” Mr Gardiner said.
    “We have already recruited and trained most of customer service team, with around
    160 people currently employed at our Mount Waverley contact centre and in our five
    retail stores. This number will rise to around 200 when EastLink opens to traffic.
    “Customers will be able to engage with ConnectEast through a range of convenient
    avenues, including online at EastLink.com.au; at our five retail stores and the
    customer service centre at Ringwood; by telephone to our 24 hour contact centre; and
    at hundreds of participating Australia Post offices, Bill Express newsagents and Coles
    Express outlets throughout Victoria.”
    Mr Gardiner noted the interoperability agreements that have been finalised with other
    Australian tollway operators, including Melbourne's CityLink, enabling customers to
    travel on all tollroads in Australia. No one in Australia needs more than one toll
    account to use any Australian tollroad.
    Project Milestones
    • $2.4 billion (96%) of the total $2.5 billion construction budget has been expended.
    • Bulk earthworks involving 7.3 million cubic metres of fill and 6.1 million cubic
    metres of cut earthworks have been completed.
    • The untolled Dandenong Bypass opened on 9 December 2007, almost 12 months
    • Lining of the twin 1.6 km tunnels has been completed. Asphalting in the tunnels
    was completed in early February 2008. Light green architectural panels are being
    installed throughout the interior of the tunnels, with more than half installed to
    • The current focus in the tunnels is on the complex mechanical and electrical,
    communications, fire emergency services and systems. All 24 jet fans have been
    installed, with testing and commissioning being progressively undertaken.
    • To date, 90% of the asphalt required has been laid along the motorway.
    • Work is nearly complete on all 88 road, creek and pedestrian bridges with 85 of
    these bridges considered structurally complete. Works continue on the Springvale
    Road interchange, Frankston Freeway connection and Harrison Street pedestrian
    bridge.• Over 90% of the total noise walls (post and panel, cantilever and composite acrylic
    panels) have been installed.
    • Around 85% of dry land and wetland planting has been achieved.
    • More than 90% of the three metre wide EastLink Trail (shared use path) has been
    • End-to-end testing of the integrated tolling and customer service system has
    • Final commissioning and testing of the 13 toll points along the motorway is well
    • Information signs are being progressively delivered and installed, including travel
    time signage, and side mounted and overhead gantry signage.
    • Mechanical and electrical installation continues along the entire motorway,
    including the installation and energisation of traffic signals and light poles.
    • Recruitment of staff by Transfield Services, ConnectEast’s operations and
    maintenance contractor, is complete, with training and familiarisation with EastLink
    • Recruitment of key customer services management and staff has been completed
    and training has commenced.
    • Customer service centres in five shopping centres along the EastLink corridor
    have been established and are now open to the public.
    • ConnectEast’s corporate headquarters and the EastLink Operations Centre in
    Ringwood officially opened by the Minister for Roads and Ports on 15 February
    • Fabrication and roadside installation of the EastLink Art Collection is underway.

    Interesting to see that the tunnel is the only thing not done yet. We are very very close to completion i think.
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